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on Transition Economics |
| By: | Bonin, John P. (BOFIT); Louie , Dana (BOFIT) |
| Abstract: | Our objective is to examine empirically the behavior of foreign banks regarding real loan growth during a financial crisis for a set of countries in which these banks dominate the banking sectors due primarily to having taken over large existing former state-owned banks. The eight countries are among the most developed in Emerging Europe, their banking sectors having been modernized by the beginning of the time period.We consider a data period that includes an initial credit boom (2004 – 2007) followed by the global financial crisis (2008 & 2009) and the onset of the Eurozone crisis (2010). Our main innovations with respect to the existing literature on banking during the financial crisis are to include explicit consideration of exchange rate dynamics and to separate foreign banks into two categories, namely, subsidiaries of the Big 6 European MNBs and all other foreign-controlled banks. Our results show that bank lending was impacted adversely by the crisis but that the two types of foreign banks behaved differently. The Big 6 banks remained committed to the region in that their lending behavior was not different from that of domestic banks corroborating the notion that these countries are a “second home market” for these banks. Contrariwise, the other foreign banks were primarily responsible for fueling the credit boom prior to the crisis but then “cut and ran” by decreasing their lending appreciably during the crisis. Our results also indicate different bank behavior in countries with flexible exchange rate regimes from those in the Eurozone. Hence, we conclude that both innovations matter in empirical work on bank behavior during a crisis in the region and may, by extension, be relevant to other small countries in which banking sectors are dominated by foreign financial institutions. |
| Keywords: | foreign bank lending; financial crisis; multinational banks; Emerging Europe |
| JEL: | G01 G15 P34 |
| Date: | 2015–11–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2015_031&r=tra |
| By: | Ivan Roberts (Reserve Bank of Australia); Graham White (Reserve Bank of Australia) |
| Abstract: | China's growing importance in the global economy and significance as a source of demand for commodities produced by many countries, including Australia, has focused increasing attention on high-frequency Chinese macroeconomic data. Yet the signal from these data is often distorted by traditional holidays whose timing varies from year to year on the Gregorian calendar. This paper shows that seasonal adjustment procedures (such as the US Census Bureau's X-12-ARIMA and the Bank of Spain's SEATS) can assist in the timely interpretation of a range of commonly used Chinese macroeconomic indicators, including industrial production, trade, credit and inflation. In addition, it suggests a strategy to optimise the selection of moving holiday corrections that account for Chinese New Year, the Dragon Boat festival and the Mid-Autumn festival, prior to seasonal adjustment. It is argued that seasonal adjustment performed with this approach is preferable to simpler techniques. |
| Keywords: | seasonal adjustment; moving holidays; calendar effects; China; X-12-ARIMA; SEATS |
| JEL: | E21 R21 R31 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:rba:rbardp:rdp2015-13&r=tra |
| By: | Dudin, Mihail Nikolaevich (Russian academy of Entrepreneurship); Lyasnikov, Nikolaj Vasilevich (Russian academy of Entrepreneurship); Dzhurabaeva, Gulnora Kahramanovna (Novosibirsk State Technical University); Kuznecov, Aleksandr Valerevich (Moskovskij institut jekonomiki, politiki i prava) |
| Abstract: | Modern global geo-economic development is characterized by a turn of the European and the whole of the Western concept of the Asia-Pacific and East Asian concept, resulting in the further evolution of the World System will determine the economics of the new industrial and post-industrial countries. The purpose of this article is to study the role of the economies of the East Asian countries in the global economic development. And in particular the purpose of this article is to analyze the situation of the textile industry of China in the world market and the prospects for its definition of sustainable and competitive development. During the presentation of this work it was found that textile production in China is currently under the influence of delayed negative effects of the global financial and economic crisis 2008 - 2010 years, which can then lead to the deployment of systemic risks in the Chinese economy, since the textile industry plays leading role in the economic development of China. In the analytical procedures were received substantive justification for increasing the competitiveness of the textile industry in China through the use of organizational and technological innovation, as well as through review of government support measures under consideration of the economic sphere. Enhancing the competitiveness and sustainable growth and development of the textile industry in China to create a new reserve of strength of the Chinese economy and secure in the long term for the textile industry unconditional leadership. |
| Keywords: | China's economy, the textile industry, sustainable development, industrial competitiveness |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:ppaper:d152e&r=tra |
| By: | Vinokurov, Evgeny; Pereboyev, Vladimir |
| Abstract: | There is an ongoing debate about the appropriateness of the official dialogue and deepening of cooperation between the European Union (EU) and the Eurasian Economic Union (EAEU). The current state of debate on the EU side is truly disappointing. As a matter of fact, EU experts are currently debating not how to structure dialogue with the EAEU, but rather whether such a dialogue should exist at all. Nevertheless the authors consider the efforts invested in structuring and mapping a future EU-EAEU rapprochement to be time well spent. In this paper the authors briefly cover a few of the outstanding issues that fall under the heading of the movement of people, namely readmission agreements, a visa-free regime, labour migration, mobility of pensions, large-scale educational exchanges, and recognition of professional diplomas and certificates. The goal at this stage is to simply map them, to provide some background information, and air some relevant policy ideas. |
| Keywords: | European Union; Eurasian Economic Union; Mobility; Labour; Cross-Border Cooperation; Education; Pensions; Migration |
| JEL: | F22 F5 I2 J6 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:68063&r=tra |
| By: | LIU Yang |
| Abstract: | This study examines the role of the individual level of social capital in the process of workers' wage determination in a Nash-bargaining wage model using Chinese micro-level data. We find a significant contribution of individual-specific social capital towards the wage level. In particular, larger individual social networks and workers' positive attitudes towards social capital increase the wage level significantly. Moreover, the effect of social capital on the wage level is much larger for male workers than females. Our results indicate that construction of individual social capital could increase workers' wages, while effort should be made to reduce unequal contributions of social capital between males and females. |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:15133&r=tra |
| By: | Dudin, Mihail Nikolaevich (Russian academy of Entrepreneurship); Lyasnikov, Nikolaj Vasilevich (Russian academy of Entrepreneurship); Dzhurabaeva, Gulnora Kahramanovna (Novosibirsk State Technical University); Kuznecov, Aleksandr Valerevich (Moskovskij institut jekonomiki, politiki i prava) |
| Abstract: | Modern global geo-economic development is characterized by a turn of the European and the whole of the Western concept of the Asia-Pacific and East Asian concept, resulting in the further evolution of the World System will determine the economics of the new industrial and post-industrial countries. The purpose of this article is to study the role of the economies of the East Asian countries in the global economic development. And in particular the purpose of this article is to analyze the situation of the textile industry of China in the world market and the prospects for its definition of sustainable and competitive development. During the presentation of this work it was found that textile production in China is currently under the influence of delayed negative effects of the global financial and economic crisis 2008 - 2010 years, which can then lead to the deployment of systemic risks in the Chinese economy, since the textile industry plays leading role in the economic development of China. In the analytical procedures were received substantive justification for increasing the competitiveness of the textile industry in China through the use of organizational and technological innovation, as well as through review of government support measures under consideration of the economic sphere. Enhancing the competitiveness and sustainable growth and development of the textile industry in China to create a new reserve of strength of the Chinese economy and secure in the long term for the textile industry unconditional leadership. |
| Keywords: | China's economy, the textile industry, sustainable development, industrial competitiveness |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:ppaper:d152&r=tra |
| By: | Antonio Carvalho (Centre for Energy Economics Research and Policy, Heriot-Watt University) |
| Abstract: | Since the end of the Soviet Union, the power sector in the countries resulting from its disintegration has evolved from a context of central planning towards independent regulation. There is great heterogeneity in reform progress in transition countries, with consequences to service quality and prices in utilities and also the view the population has of such services. This paper conducts an overview of the modern power sector in transition economies and analyses drivers of reported household satisfaction with the quality of electricity services in 27 countries using cross-sectional survey data from the EBRD Life in Transition Survey II, in a context of improving regulatory and infrastructural frameworks, using an ordinal random effects model with a probit link function. Key drivers of reported satisfaction are the uses of electricity within the household and some characteristics such as age, economic conditions and general life satisfaction. However, there is no evidence of the effect of power sector reform on the opinion of households. This points that the general life experience in transition can be the key driver of how households feel about utilities, as reform brings conflicting effects that stem from increasing cost sustainability, competition, transparency and quality of the service. |
| Keywords: | Electricity, Transition Economies, Household Satisfaction, Ordinal Probit |
| JEL: | P21 P28 C25 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:hwc:wpaper:001&r=tra |
| By: | Huang, Wei (Harvard University); Zhou, Yi (University of California, Berkeley) |
| Abstract: | Using plausibly exogenous variations in the ethnicity-specific assigned birth quotas and different fertility penalties across Chinese provinces over time, we provide new evidence for the transferable utility model by showing how China's One-Child Policy induced a significantly higher unmarried rate among the population and more interethnic marriages in China. We further develop the model and find that a policy-induced welfare loss originates from not only restricted fertility but also from marriage distortion, and both depend solely on the corresponding reduced-form elasticities. Our calculations suggest that the total welfare loss is around 4.9 percent of yearly household income, with marriage distortion contributing 17 percent of this welfare loss. These findings highlight the importance of taking into consideration the unintended behavioral responses to public policies and the corresponding social consequences. |
| Keywords: | One-Child Policy, marriage distortion, welfare loss |
| JEL: | H20 I31 J12 J13 J18 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9532&r=tra |
| By: | Olga V. Kotomina (National Research University Higher School of Economics) |
| Abstract: | Knowledge intensive business services (KIBS) are characterized by high concentration in large urban areas due to the presence of more developed infrastructure, higher human capital development, proximity to the large customer, etc. However, companies in the KIBS sector have potential for development (new knowledge, experience) in collaboration with agents located in other regions. This paper is focused on the spatial aspects of the knowledge intensive business services sector in Russia. The study is based on a unique empirical data from mass surveys of Russian producers and consumers of KIBS. Comparative analysis of the incoming and outgoing flows of KIBS in Russian regions helps us to classify federal districts by their involvement in KIBS exchange, and to map the intensity of these flows. We have identified regions that are actively involved in both the purchase of services and their delivery outside the regional boundaries (Volga and Central Districts); active regions of consumption with an average level of production (Northwestern and Siberian Districts); and the passive regions, who are only weakly involved in inter-regional exchange of knowledge intensive business services (Ural and Southern Federal Districts) |
| Keywords: | Knowledge intensive business services, spatial proximity, spatial development, interregional cooperation. |
| JEL: | O18 R11 R12 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:50sti2015&r=tra |
| By: | Chen, Kaiji (Emory University and Federal Reserve Bank of Atlanta); Wen, Yi (Federal Reserve Bank of St. Louis) |
| Abstract: | China's housing prices have been growing nearly twice as fast as national income in the past decade despite (1) a phenomenal rate of return to capital and (2) an alarmingly high vacancy rate. This paper interprets such a prolonged paradoxical housing boom as a rational bubble that emerges naturally from China's large-scale economic transition, featuring an exceptionally high rate of return to capital driven by massive resource reallocation. Because such primarily resource-reallocation-driven high capital returns are not sustainable in the long run, expectations of high future demand for alternative stores of value can induce even the currently most productive agents to speculate in the housing market, even if housing provides no rents or utilities. We show that such speculative investment behavior can create a self-fulfilling housing bubble that grows much faster than the national income during an economic transition, thus explaining China's massive "ghost apartment" phenomenon and decade-long faster-than-income growth in housing prices despite high capital returns. |
| Keywords: | housing bubble; resource misallocation; Chinese economy; development; economic transition |
| JEL: | E22 E23 O11 O16 P23 P24 R31 |
| Date: | 2015–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedacq:15-03&r=tra |
| By: | Edward F. Baranov (National Research University Higher School of Economics); Igor A. Kim (National Research University Higher School of Economics); Dmitri I. Piontkovski (National Research University Higher School of Economics); Elena A. Staritsyna (National Research University Higher School of Economics) |
| Abstract: | Time series of Input-Output (IO) accounts at current and constant prices are widely applied to study the dynamics and structure of economic activity within country and conduct cross-country comparisons and analyses of globalization processes as well as their impacts. For these purposes IO accounts have to adhere to a uniform nomenclature of products and economic activities in accordance with international standards. Unfortunately, Russian statistics currently do not satisfy this condition. The first Russian IO accounts for 2011, built in accordance with international standards, will be published only at the end of 2015 (previously published tables for 1995-2003 were built in the classifications "inherited" from the Soviet period). The IO accounts for 2012 and subsequent years will be built by extrapolating the cost structure of products and services for 2011. However, it leaves the open question of extending the time series of these tables for the retrospective period prior to 2011. As international experience shows, this type of calculation was predominantly conducted by research organizations and universities. Given this, the National Research University Higher School of Economics has been developing a methodology for constructing a retrospective time series of a part of the IO accounts (use tables and valuation matrices) from 2010, in order to experimentally test them, and apply them to the official IO accounts for 2011. The following results were obtained from our study. First, we proposed a two-step procedure to transform IO accounts for 2003 from the Soviet into the OKVED/OKPD classifications. Second, we used a two-stage biproportional method generalizing the RAS procedure to construct a time series of IO accounts for the subsequent period using the 2003 transformed IO accounts as the starting point. Finally, we recalculated a part of the IO accounts (use tables) at the previous year prices. |
| Keywords: | Input-Output Accounts, Soviet classifications, NACE rev.1, CPA, time series, RAS, matrix balancing |
| JEL: | C82 D57 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:108/ec/2015&r=tra |
| By: | Tamás Ilyés (Magyar Nemzeti Bank (Central Bank of Hungary)); Lóránt Varga (Magyar Nemzeti Bank (Central Bank of Hungary)) |
| Abstract: | In our paper, we introduce the Hungarian Payment System Model (HUPS), a computable general equilibrium model with detailed payment services which can be used for policy evaluation and forecast. In the last years, several studies investigated different aspects of payment systems and some papers used equilibrium theory to study a specific segment or question of retail payments. In our paper, we take a step forward as we extend this research using the general equilibrium approach. The HUPS model is a large and highly disaggregated computable general equilibrium model with 25 economic agents and nearly 100 payment services, which cover most of the payment system supply chain in Hungary. It contains 7 types of costs for each payment service, varying degree of economies of scale, oligopoly and cross-product pricing and agent behaviour adjustments to payment method costs. In our model, the payment sector is an integrated part of the economy as every actor has to make payment decisions related to its activities. As a result, the model can be used for thorough economic evaluation of many kinds of policies and other changes in the field of retail payments. The HUPS model is calibrated on the large and up-to-date information base of Hungarian payment statistics, surveys and studies – most notably the Hungarian cost of payments study – which makes it a powerful and robust modelling and forecasting tool. |
| Keywords: | payment economics, CGE modelling, retail payments, cost of payments. |
| JEL: | C68 E27 E42 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:mnb:wpaper:2015/3&r=tra |
| By: | Kinnunen, Jyri (BOFIT); Martikainen, Minna (BOFIT) |
| Abstract: | In this paper, we explore a relation between expected returns and idiosyncratic risk. As in many emerging markets, investors in the Russian stock market cannot fully diversify their portfolios due to transaction costs, information gathering and processing costs, and short-comings in investor protection. This implies that investors demand a premium for idiosyncratic risk – unique asset-specific risk plays a role in investment decisions. We estimate the price of idiosyncratic risk using MIDAS regressions and a cross-section of Russian industry portfolios. We find that idiosyncratic risk commands an economically and statistically significant risk premium. The results remain unaffected after controlling for global pricing factors and short-term return reversal. |
| Keywords: | idiosyncratic risk; industry risk; cross-sectional returns; MIDAS; Russia |
| JEL: | G12 |
| Date: | 2015–10–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2015_030&r=tra |
| By: | Pamela Campa; Michel Serafinelli |
| Abstract: | This paper investigates the extent to which attitudes are affected by political regimes and government policies, and the channels of influence. We focus on gender-role attitudes and female attitudes toward work, exploiting the imposition of state-socialist regimes across Central and Eastern Europe, and the fact that the new regimes encouraged women's employment, for both ideological and instrumental reasons. We use two different identification strategies and datasets. First, we take advantage of the German partition into East and West after 1945 and restricted-access information on place of residence to execute a spatial regression discontinuity design. We find more positive attitudes toward work in the sample of women who used to live in East Germany. In terms of channels, we find evidence that the experience of employment, arguably one of the very few positive aspects of living under state-socialism in East Germany, changed women's attitudes. We do not find similar evidence for the role of propaganda. Second, we employ a difference-in-differences strategy that compares attitudes formed in Central and Eastern European countries (CEECs) and Western European Countries (WECs), before and after the imposition of state socialism in CEECs. Gender-role attitudes formed in CEECs during the state socialist period appear to be significantly less traditional than those formed in WECs. Overall, our study addresses previous identification and data limitations and finds that attitudes are profoundly affected by politico-economic regimes. |
| Keywords: | gender-role attitudes, attitudes towards work, state-socialism, Central and Eastern Europe, spatial regression discontinuity design |
| JEL: | Z10 P51 J16 |
| Date: | 2015–11–26 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-553&r=tra |
| By: | Matytsin,Mikhail; Moorty,Lalita M.; Richter,Kaspar |
| Abstract: | Do regions with higher working age populations grow faster? This paper examines this question using data from Russian regions and finds evidence that demographic trends influence regional growth convergence. In other words, keeping other factors constant, poorer regions grow faster than richer regions, and some of the growth convergence is explained by demographic changes: faster growth in poor regions in the past was related in part to more favorable demographic trends. This finding has important consequences for Russia. If the demographic trends in poorer regions worsen in the future, this could dampen economic convergence. Unless there are significant increases in labor productivity or additions to the labor force through migration, growth in Russian regions will moderate as the Russian population shrinks and ages in the coming decades. |
| Keywords: | Pro-Poor Growth,Population Policies,Regional Economic Development,Emerging Markets,Demographics |
| Date: | 2015–11–23 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7501&r=tra |
| By: | Yuriy O. Gaivoronskiy (National Research University Higher School of Economics) |
| Abstract: | The research is dedicated to the analysis of the relation between political competition that measured as the sum total of the electorate competition and the consolidation of the elite, as well as of the effectiveness of the fulfillment of the social and economic responsibilities of the regional authorities. The results of the analysis show that though the influence of the political competition within hybrid Russian regional political regimes is significant, it lacks some definite direction, as well as shows itself very selectively (mostly in health service and budgetary management) and is based upon weak social links, which is quite typical for partly institutionalized feedback and socio-political control channels |
| Keywords: | political competition, subnational political regimes, efficiency, Russian regions. |
| JEL: | D72 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:28/ps/2015&r=tra |
| By: | Chen, Xi (Yale University) |
| Abstract: | Status concern and the feelings of relative deprivation affect individual behavior and well-being. Traditional norms and the alarming inequality in China have made relative deprivation more and more intense for the Chinese population. This paper reviews empirical literature on China that attempts to test the relative deprivation hypothesis. We review the origins and pathways of relative deprivation, compare its economic measures in the literature, and summarize their applications. Drawing from solid empirical evidence, we discuss important policy implications on redistribution, official regulations and grassroots sanctions, and relative poverty alleviation. |
| Keywords: | inequality, status concern, relative deprivation, well-being, China |
| JEL: | I14 I18 I32 B41 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9519&r=tra |
| By: | Clemens Fuest (ZEW and University of Mannheim); Jing Xing (Shanghai Jiao Tong University) |
| Abstract: | In this study, we analyse the cyclicality of fiscal policies in China during the period 1978-2013. We find that the cyclicality of local government spending in China significantly affects the cyclicality of total government spending. By employing both time-series and province-level panel data, we show that local budgetary government spending was strongly procyclical during the 1980s, but it became counter-cyclical with respect to nationwide output fluctuations and acyclical with respect to region-specific output shocks since the mid-1990s. We argue that these are likely to be consequences of the 1994 fiscal reform, which revamped the fiscal relations between the central and local governments, reduced the procyclicality of local government budgetary revenue and brought in counter-cyclical intergovernmental transfers. Findings of this study contribute to the debate on how developing and emerging countries, in particular those with federal fiscal structures, could reduce the procyclicality of their fiscal policies. |
| Keywords: | Fiscal federalism, tax reform, government spending |
| JEL: | H71 H72 H77 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:btx:wpaper:1514&r=tra |
| By: | Vinokurov, Evgeny; Demidenko, Mikhail; Pelipas, Igor; Tochitskaya, Irina; Shymanovich, Gleb; Lipin, Andrey |
| Abstract: | After the establishment of the Customs Union (CU) and the Single Economic Space (SES), Belarus, Kazakhstan and Russia have repeatedly stated the need to eliminate exemptions, limitations, and barriers to mutual trade in goods and services. This report represents the first stage of a study on the economic impact of reduction within the SES and the emerging Eurasian Economic Union (EEU) of non-tariff barriers (NTBs) to trade among Member States. It gives an overview of works on the definition and classification of NTBs, and the quantitative assessment and calculation of the economic effects of NTBs reduction. The report also presents the results of surveys and interviews with enterprises and companies of Belarus, Kazakhstan, and Russia that export goods and services to the markets of the CU and EEU. These surveys and interviews revealed respondents’ views on the NTBs they face when exporting to each of the partner states. They also obtained quantitative estimates of NTBs as a percentage of the value of exported goods, which made it possible to estimate the costs of each of the NTBs to the enterprises. |
| Keywords: | Non-Tariff Barriers; Enterprises; Eurasian Economic Union; Trade; Single Economic Space |
| JEL: | F02 F1 F15 F4 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:68060&r=tra |